Tax Treaty Overrides A Qualified Defense of US Practice

The ability of some countries to unilaterally change, or “override,” their tax treaties through domestic legislation has frequently been identified as a serious threat to the bilateral tax treaty network.2 In most countries, treaties (including tax treaties) have a status superior to that of ordinary domestic laws (see, e.g., France, Germany, the Netherlands).3 However, in some countries (primarily the U.S., but also to some extent the U.K. and Australia) treaties can be changed unilaterally by subsequent domestic legislation. This result clearly violates international law as embodied by the Vienna Convention on the Law of Treaties (“VCLT”), which is recognized as customary international law even by countries (like the U.S.) that have not formally ratified it.